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Last Updated: Wednesday, 15 October, 2003, 16:02 GMT 17:02 UK
GM profits rescued by finance arm
GM car
GM cars are competing in a crowded market
US car giant General Motors (GM) has reported better than expected profits thanks to a strong performance from its financial services business.

GM, the world's biggest carmaker, said profits for the three months to September came in at $425m (255m), or 79 cents per share, compared with a loss of $804m during the same period last year.

The figure comfortably outstripped the 67 cents per share forecast by Wall Street analysts.

Revenues were also higher, climbing 5.4% on the year to $45.9bn.

The bulk of the increase in profits stemmed from GM's financial services arm, GMAC, which specialises in mortgage lending and insurance.

GMAC's profits climbed 32% on the year to $630m, while earnings from its global car business slumped by more than 90% to $34m.

The deteriorating performance of GM's car unit partly reflected aggressive sales incentives aimed at luring US consumers into showrooms amid intensifying competition from Japanese rivals.

Harley roars ahead

GM chief executive Rick Wagoner said a stronger US economy and an "enthusiastic" response to the firm's new products "give us reason for optimism as we look forward".

But Wall Street investors reacted cautiously, marking GM shares five cents lower to $43.93 in morning trade.

Another icon of US motoring, Harley Davidson, also turned in better than expected results on Wednesday, crediting strong sales of its legendary motorcycles.

The Milwaukee-based company said third quarter profits came in at $190m, or 62 cents per share, up from $165m during the same period last year.

However, sales were down by about $1m compared with last year at $1.13bn, forcing Harley shares 3% lower in pre-open trade on Wall Street.

Analysts said the year-on-year comparison had been distorted by exceptionally strong sales in 2002, when the company began producing coveted one-off models to commemorate its 100th anniversary in 2003.

The motorcycle giant added that it planned to produce 400 more machines this year than previously forecast.

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